As the UK tries to steady its economy and reshape its global partnerships post-Brexit, Prime Minister Keir Starmer is racing against the clock to secure a crucial trade deal with the United States—before things get even messier with Donald Trump’s escalating tariffs.
With a major Brexit “reset” announcement expected at an EU summit on May 19, Starmer is hoping to get this US pact across the finish line in time to avoid further economic pain.
Trump’s Tariffs Put UK Exports Under Pressure
The pressure’s been building since Trump’s administration hit the UK with eye-watering 25% tariffs on cars and steel imports—putting British industries in a tough spot.
On top of that, the looming threat of new restrictions on the pharmaceutical sector has added urgency to ongoing negotiations.
According to insiders, the current deal on the table could help soften the blow.
It includes new quotas aimed at protecting UK exports and might even bring some cuts to those steep headline tariffs.
UK Ready to Bend on Digital Tax and US Imports
In exchange, Britain may have to make some uncomfortable concessions.
That could mean tweaking the UK’s digital tax—something Washington has been grumbling about—and lowering tariffs on US-manufactured cars and certain farming products.
Business Secretary Jonathan Reynolds has hinted that a deal might be close, though he was careful not to confirm anything just yet.
“Teams are still working,” he said during a media round this morning, but Labour insiders say the general framework is already in place.
Will Trump Play Ball?
Of course, getting Trump to agree is a different matter altogether.
One Labour MP put it bluntly: “No one knows what happens when you put stuff in front of Trump.”
That uncertainty has been hanging over the talks since Starmer and Trump met at the White House back in February to discuss the possibility of a Transatlantic trade pact.
That was before Trump’s so-called “Liberation Day” announcement—when the full force of his new tariffs came crashing down.
No Room for US Demands on Food and Free Speech
Despite the urgency, Starmer has drawn a line on some of the US’s more controversial demands.
He’s refused to water down UK food standards to allow more American agricultural imports and has stood firm against adjusting Britain’s online safety laws—something some US lawmakers argue stifles free speech.
That hasn’t stopped speculation, though, about what exactly Britain will give up in exchange for tariff relief.
Economists Warn of Global Fallout
Meanwhile, economists are waving red flags. They’re warning that Trump’s aggressive tariff policies could trigger a global economic slowdown—right as Chancellor Rachel Reeves is trying to kickstart growth in the UK.
Although Trump has already pulled back on some of his harsher measures following backlash from Wall Street and concerns about the ballooning US debt, the damage may already be underway.
UK Caught Between Europe and America?
Starmer has insisted that Britain doesn’t have to pick sides between Europe and America.
“The national interest demands that we work with both,” he’s repeatedly said.
But with the EU eyeing tighter food regulations and the US pushing for trade sweeteners, that balancing act isn’t getting any easier.
A Wider Global Strategy from Washington
Britain isn’t the only one in America’s trade sights.
The US is simultaneously holding talks with Canada, Mexico, Japan, Vietnam, India, and the EU.
According to US Treasury Secretary Scott Bessent, some of those agreements could be announced “as early as this week.”
He hinted that several nations have made “good offers,” though he stopped short of sharing specifics.
What the Auto Industry Thinks
Unsurprisingly, the UK car industry is watching all this very closely.
One top exec told the Financial Times that while quotas might offer short-term help, the bigger priority is slashing that crushing 25% tariff.
“Quotas are complex and inherently limiting to trade,” they said.
“The most important thing is cutting the 25% tariff—because above about 10%, it’s just not sustainable.”
What Comes Next?
With the UK trying to walk a tightrope between EU alignment and a stronger US trade partnership, the stakes couldn’t be higher.
If a deal is going to be done, it’ll have to happen fast—before the May 19 EU summit puts even more pressure on Starmer to prove that post-Brexit Britain can still hold its own on the world stage.